IC56 Mock Test Sample 8
Fire insurance policies include several important conditions governing claims, coverage, and responsibilities. Condition 3 deals with policy voidability due to misrepresentation or non-disclosure. The principle of indemnity ensures no profit is made from claims, while reinstatement policies avoid depreciation deductions. Concepts like salvage, ex-gratia payments, and declaration clauses define claim handling and policy features. Insurers follow timelines for survey and settlement, and apply safeguards like close proximity. Coverage applies only to insured perils, excluding illegal acts or abandonment. Sum insured represents the maximum liability. Policyholders must act in utmost good faith, and contribution applies when multiple insurers share a loss.
Q1. What is the significance of Condition 3 in a fire insurance policy?
a) Policy voidable due to misrepresentation or non-disclosure
b) Deduction of pro-rata premium on reinstatement
c) Policy termination with 15 days notice
d) Disputes referred to arbitration
Q2. Which term refers to property that escapes damage from an insured peril?
a) Value
b) Salvage
c) Warranty
d) Consideration
Q3. Identify the incorrect statement regarding fire insurance claims
a) Surveyor appointed within 72 hours
b) Surveyor submits report within 30 days
c) Additional report within 3 weeks
d) Insurer settles claim within 45 days
Q4. In reinstatement value policy, no deduction is made for
a) Wear and tear
b) Depreciation
c) Years of usage
d) All of the above
Q5. As per __________, claim should not include profit
a) Insurable interest
b) Subrogation
c) Indemnity
d) Contribution
Q6. Fire insurance ceases after ______ from fall of building
a) 7 days
b) 15 days
c) 30 days
d) 45 days
Q7. Close proximity applies when claim occurs within ______
a) 5 days
b) 7 days
c) 15 days
d) 30 days
Q8. Fire policy covers only material damage caused by insured perils
a) True
b) False
Q9. Which clause applies to imported goods sold but not delivered?
a) Contract Price Clause
b) Declaration Clause
c) Floater Clause
d) Property Clause
Q10. Localized fire like burning grass is called
a) Fire
b) Standard fire
c) Bush fire
d) None of these
Q11. Payments made as an act of grace are called
a) Warranty
b) Ex-gratia payments
c) Representation
d) Consideration
Q12. First step to fill Fire Insurance Form PDF online
a) Print form
b) Choose template
c) Mail form
d) Call service
Q13. Which statement is correct regarding claim payment?
a) Not payable for insured peril
b) Payable for insured peril only
c) Not payable in all cases
d) Payable in all cases
Q14. Document submitted by insurer explaining complaint decision
a) Agreement
b) Consideration
c) Self Contained Note
d) Application form
Q15. Transfer of insurable interest does not transfer policy automatically
a) True
b) False
Q16. Features of Declaration Clause include
a) Monthly declarations
b) Deemed full value if not declared
c) Liability limited to sum insured
d) All of the above
Q17. Fire policy does NOT cover
a) Seizure or occupation
b) Voluntary abandonment
c) Illegal trade losses
d) All of the above
Q18. Maximum amount insurer pays is called
a) Interest
b) Sum insured
c) Dividend
d) Premium
Q19. Contribution example for partial loss (underinsurance case)
a) X = 40,000 Y = 50,000
b) X = 50,000 Y = 40,000
c) X = 30,000 Y = 60,000
d) X = 20,000 Y = 70,000
Q20. Fundamental duty of insured is to observe
a) Common law
b) Content
c) Good faith
d) Misbehaviour
